Stock markets to move higher as traders respond to fiscal cliff deal | iNFOnews

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Stock markets to move higher as traders respond to fiscal cliff deal

January 02, 2013 - 6:25 AM

TORONTO - Stock markets appeared ready to move higher Wednesday as investors return to trading for the first time since Congress agreed on measures to avoid the so-called "fiscal cliff."

The Canadian dollar rose 1.06 of a cent to 101.57 cents US.

The Dow Jones industrial futures were up 178 points to 13,205, while the broader S&P futures added 22.7 points to 1,442.80 and the Nasdaq futures were up 44.25 points to 2,699.50.

The deal, reached just before midnight Tuesday night, left several issues unresolved and it was unclear how long markets would be lifted by the agreement.

The bill that Congress approved calls for higher taxes on incomes over $400,000 for individuals and $450,000 for couples, a victory for Obama. Earnings above those amounts would be taxed at a rate of 39.6 per cent, up from 35 per cent. It also delays for two months $109 billion worth of across-the-board spending cuts set to start taking affect this week.

Though fiscal cliff fears have eased, investors still have a host of issues to worry about — not least the prospect of more debates over unresolved longer-term U.S. budget issues.

Next up is a fight over the debt ceiling, or how much the government is allowed to borrow. President Barack Obama said he will not negotiate the issue.

In commodities, oil prices rose with the February contract on the New York Mercantile Exchange ahead $1.97 to US$93.79 a barrel.

Gold prices picked up with the March bullion contract ahead $12.40 to US$1,688.20 an ounce. Copper prices for the March contract were up 8.4 cents to US$3.65 a pound.

In Europe, the FTSE 100 index of leading British shares jumped 2.2 per cent to 6,028, its first foray above the 6,000 mark since July 2011. The CAC-40 in France rose 2.4 per cent to 3,729 while Germany's DAX was up 2.3 per cent at 7,786.

Earlier, in Asia, Hong Kong's Hang Seng index shot up 2.9 per cent to close at 23,311.89, its highest finish since June 1, 2011. Australia's S&P/ASX 200 surged 1.2 per cent to close at 4,705.90, its best finish in 19 months, while South Korea's Kospi jumped 1.7 per cent to 2,031.10.

News from © The Canadian Press, 2013
The Canadian Press

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